Asked by Matthew Valenzuela on Jul 25, 2024
Verified
Dollar prices and relative prices are both nominal variables.
Dollar Prices
The price of a good or service expressed in units of the U.S. dollar.
Relative Prices
The price of one good or service compared to another, typically influencing consumer choice and resource allocation.
Nominal Variables
Variables measured in monetary terms and not adjusted for inflation, representing prices or values at the time of transaction.
- Describe the nature of inflation and deflation, and the techniques used to quantify them.
Verified Answer
MA
Melanie AndradeJul 30, 2024
Final Answer :
False
Explanation :
Dollar prices are nominal variables because they are expressed in monetary terms. However, relative prices, which compare the price of one good or service to another, are real variables because they reflect the value of goods in terms of other goods, independent of the overall level of prices.
Learning Objectives
- Describe the nature of inflation and deflation, and the techniques used to quantify them.